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Rent increase

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  • 16-12-2014 1:01pm
    #1
    RollYerOwn
    Registered Users Posts: 154 ✭✭


    In a long-standing tenancy of several years with an active lease, can rent be suddenly increased by any amount with only a short period of notice?

    Let's say the rent increase matches the new elevated market levels for the area, can the rent be increased by such an amount that the tenancy is in no way affordable by the current tenant? And if so is the tenant liable for the increased rent for the duration of the current lease?
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    #2
    ted1
    Registered Users Posts: 23,327 ✭✭✭✭ted1


    RollYerOwn wrote: »
    In a long-standing tenancy of several years with an active lease, can rent be suddenly increased by any amount with only a short period of notice?

    Let's say the rent increase matches the new elevated market levels for the area, can the rent be increased by such an amount that the tenancy is in no way affordable by the current tenant? And if so is the tenant liable for the increased rent for the duration of the current lease?

    Yes, the rent can be raised once every 12 months, to match the current market rate.


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    #3
    surpy
    Closed Accounts Posts: 383 ✭✭surpy


    can they increase the rent?
    if you have a fixed lease : no (until lease expires)
    rolling / part 4 lease : yes (every 12 months)

    can they increase a huge amount?
    they can only increase to market rate

    can they do it on short notice?
    minimum 28 days notice, in writing

    http://www.threshold.ie/advice/dealing-with-problems-during-your-tenancy/how-to-deal-with-rent-increases/


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    #4
    Daith
    Registered Users Posts: 4,936 ✭✭✭Daith


    RollYerOwn wrote: »
    In a long-standing tenancy of several years with an active lease, can rent be suddenly increased by any amount with only a short period of notice?

    Let's say the rent increase matches the new elevated market levels for the area, can the rent be increased by such an amount that the tenancy is in no way affordable by the current tenant? And if so is the tenant liable for the increased rent for the duration of the current lease?

    When was the last time the rent was reviewed?


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    #5
    MarkAnthony
    Closed Accounts Posts: 6,934 ✭✭✭MarkAnthony


    Always wondered - and I hope you don't mind me asking here OP but your question has been fully answered - do they have to reduce it again if the market goes down? Does that only happen if they 'review the rent' which obviously they wouldn't do in a decreasing market or can the tenant request a rent review?

    TIA


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    #6
    ted1
    Registered Users Posts: 23,327 ✭✭✭✭ted1


    MarkAnthony wrote: »
    Always wondered - and I hope you don't mind me asking here OP but your question has been fully answered - do they have to reduce it again if the market goes down? Does that only happen if they 'review the rent' which obviously they wouldn't do in a decreasing market or can the tenant request a rent review?

    TIA
    A tenant can ask for a reduction, but it doesn't mean it will be accepted.


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    #7
    pwurple
    Closed Accounts Posts: 12,449 ✭✭✭✭pwurple


    MarkAnthony wrote: »
    Always wondered - and I hope you don't mind me asking here OP but your question has been fully answered - do they have to reduce it again if the market goes down? Does that only happen if they 'review the rent' which obviously they wouldn't do in a decreasing market or can the tenant request a rent review?

    TIA

    If you ask I'd say it happenes. I dropped the rent for my part 4 tenants when they requested as the market dropped. That's because I have excellent tenants, and I was willing to take a small hit to keep them.


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    #8
    MarkAnthony
    Closed Accounts Posts: 6,934 ✭✭✭MarkAnthony


    ted1 wrote: »
    A tenant can ask for a reduction, but it doesn't mean it will be accepted.

    Can they force a review through the PRTB if the market has dropped?

    Thanks again.

    Sorry OP if you feel this is a derailment say so and I shall exit :)


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    #9
    The Spider
    Registered Users Posts: 1,273 ✭✭✭The Spider


    MarkAnthony wrote: »
    Can they force a review through the PRTB if the market has dropped?

    Thanks again.

    Sorry OP if you feel this is a derailment say so and I shall exit :)

    Nope, but they can move out and rent somewhere else at the cheaper rate, if it has dropped the landlord will only be able to rent it out at the market rate.

    Happened lots in the bust, usually landlord dropped the rent to the market level, all we're seeing now is a readjustment to previous rent levels.


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    #10
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    Definitely true for the downturn (or rather return to normality).


    However in the upturn (or return to insanity) that is a starving Dublin rental market that has again overinflated the return on rental income for landlords..


    Thanks for all the responses. One thing remains unanswered as far as I can see however - if the agreement can be rewritten by the landlord (alone) to a quarterly increasing new market level - is the tenant liable for the duration of their lease for this newly announced cost of rental?


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    #11
    Grandpa Hassan
    Registered Users Posts: 1,945 ✭✭✭Grandpa Hassan


    RollYerOwn wrote: »
    Definitely true for the downturn (or rather return to normality).


    However in the upturn (or return to insanity) that is a starving Dublin rental market that has again overinflated the return on rental income for landlords..


    Thanks for all the responses. One thing remains unanswered as far as I can see however - if the agreement can be rewritten by the landlord (alone) to a quarterly increasing new market level - is the tenant liable for the duration of their lease for this newly announced cost of rental?

    The rent can only be increased once every 12 months (not quarterly), to the market level. But then, yes, that is the rent that you must pay for the duration of the lease (or as long as you are there under part IV), or the next rent review in minimum 12 months.


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    #12
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    Grandpa Hassan wrote: »
    The rent can only be increased once every 12 months (not quarterly), to the market level. But then, yes, that is the rent that you must pay for the duration of the lease (or as long as you are there under part IV), or the next rent review in minimum 12 months.


    Sorry, yes you're correct, the reviews of the index are quarterly but the increase is permitted only annually.


    Seems like a great way to guarantee that an under-par property can be guaranteed a maximum rental income on an annual basis. Just advertise it cheaply, get as long a lease as somebody will offer, then the next day announce that the rent will go up within 28 days and just raise the rent to full market value for a much better property in a better area of Dublin and force tenant to pay.


    So is this a great little scam for unscrupulous landlords with no protection offered by an agreement in the form of a lease (except that the lease will eventually end)?


    And for those that have no way of paying the kind of rent they now owe for the duration?...


    Frighteningly real for someone I know.


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    #13
    surpy
    Closed Accounts Posts: 383 ✭✭surpy


    RollYerOwn wrote: »
    Sorry, yes you're correct, the reviews of the index are quarterly but the increase is permitted only annually.


    Seems like a great way to guarantee that an under-par property can be guaranteed a maximum rental income on an annual basis. Just advertise it cheaply, get as long a lease as somebody will offer, then the next day announce that the rent will go up within 28 days and just raise the rent to full market value for a much better property in a better area of Dublin and force tenant to pay.


    So is this a great little scam for unscrupulous landlords with no protection offered by an agreement in the form of a lease (except that the lease will eventually end)?


    And for those that have no way of paying the kind of rent they now owe for the duration?...


    Frighteningly real for someone I know.

    are you saying that someone had their rent increased while a lease was in effect within 28 days of moving into a property?


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    #14
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    surpy wrote: »
    are you saying that someone had their rent increased while a lease was in effect within 28 days of moving into a property?


    No, within several months of the lease ending in that case - frightening because the property isn't worth what's being sought and the person will have to take their child out of school to move to another county - yet still owe the rent (which she hasn't agreed to) being sought on the remainder of the duration of the lease (at least that's what I gather from the responses here).


    My point relating to an increase within 28 days is that it seems to be all the notice that is required to raise the rent from an agreed amount (which may have been agreed in a lease signed on the day before - and what is to prevent landlords doing this?


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    #15
    runawaybishop
    Registered Users Posts: 9,503 ✭✭✭runawaybishop


    RollYerOwn wrote: »
    No, within several months of the lease ending in that case - frightening because the property isn't worth what's being sought and the person will have to take their child out of school to move to another county - yet still owe the rent (which she hasn't agreed to) being sought on the remainder of the duration of the lease (at least that's what I gather from the responses here).


    My point relating to an increase within 28 days is that it seems to be all the notice that is required to raise the rent from an agreed amount (which may have been agreed in a lease signed on the day before - and what is to prevent landlords doing this?

    Once you've signed the lease that is the rental amount for the duration of that lease. You cant sign a lease and then be expected to pay an increased rent 28 days later.

    Apart from that there is nothing to stop a landlord charging what the market will bear for the property as long as the review is no more than once per year. It is a business after all.


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    #16
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    runawaybishop wrote: »
    Once you've signed the lease that is the rental amount for the duration of that lease. You cant sign a lease and then be expected to pay an increased rent 28 days later.

    Apart from that there is nothing to stop a landlord charging what the market will bear for the property as long as the review is no more than once per year. It is a business after all.


    Ok, so there's something that prevents them raising the rent in the first year but not subsequent years, is that correct?


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    #17
    surpy
    Closed Accounts Posts: 383 ✭✭surpy


    if the lease is over a rent increase can be applied. if you object, follow the guidelines in the threshold link i posted.

    if you agree but cant afford, unfortunately, you will have to move out like so many other people have had to do in this situation (i dont agree like what is happening and wish there was an alternative)

    if you give the landlord notice, i dont believe you are liable for any increase in rent, but definitely speak to thrreshold or other legal advice ASAP


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    #18
    runawaybishop
    Registered Users Posts: 9,503 ✭✭✭runawaybishop


    RollYerOwn wrote: »
    Ok, so there's something that prevents them raising the rent in the first year but not subsequent years, is that correct?

    The rent can only be reviewed once every 12 months, and the increase cannot exceed market rates.


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    #19
    ted1
    Registered Users Posts: 23,327 ✭✭✭✭ted1


    RollYerOwn wrote: »
    Sorry, yes you're correct, the reviews of the index are quarterly but the increase is permitted only annually.


    Seems like a great way to guarantee that an under-par property can be guaranteed a maximum rental income on an annual basis. Just advertise it cheaply, get as long a lease as somebody will offer, then the next day announce that the rent will go up within 28 days and just raise the rent to full market value for a much better property in a better area of Dublin and force tenant to pay.


    So is this a great little scam for unscrupulous landlords with no protection offered by an agreement in the form of a lease (except that the lease will eventually end)?


    And for those that have no way of paying the kind of rent they now owe for the duration?...


    Frighteningly real for someone I know.

    Your completely wrong, the rent can ot be increased once every 12 months. So they can't increase it till you have lived there for 12 months


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    #20
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    ted1 wrote: »
    Your completely wrong, the rent can ot be increased once every 12 months. So they can't increase it till you have lived there for 12 months



    If you move in under an agreement and the rent does not change during the duration of that lease - then it has not increased. Moving in is not itself an increase.


    If you move in under an agreement and the rent DOES change to a higher rent during that time, then it has increased. Once.


    My point is that I haven't seen any argument that this can't be done within the first year.


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    #21
    runawaybishop
    Registered Users Posts: 9,503 ✭✭✭runawaybishop


    RollYerOwn wrote: »
    If you move in under an agreement and the rent does not change during the duration of that lease - then it has not increased. Moving in is not itself an increase.


    If you move in under an agreement and the rent DOES change to a higher rent during that time, then it has increased. Once.


    My point is that I haven't seen any argument that this can't be done within the first year.

    You cant unilaterally change the terms of a lease. If you are on a lease with a fixed amount you cant change it for the duration of that lease, unless rent review is part of the terms of that lease. If you are on a fixed 1 year lease which is renewed and the rent amount is set in the lease then that is a rent review and would fire off the 12 month cooldown period.


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    #22
    surpy
    Closed Accounts Posts: 383 ✭✭surpy


    They can't change the rent in the first year.
    It can be set once per year - it is set at day 1 then can't be reset for 12 months. After 12 months it can be changed at any time (e.g. 18, 22 mths etc) but then it's set again for the next 12


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    #23
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    runawaybishop wrote: »
    The rent can only be reviewed once every 12 months, and the increase cannot exceed market rates.



    Agreed, so could the rent be reviewed after one month of a one year lease? Would it not be correct to say that it has not been reviewed previously?


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    #24
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    runawaybishop wrote: »
    You cant unilaterally change the terms of a lease. If you are on a lease with a fixed amount you cant change it for the duration of that lease, unless rent review is part of the terms of that lease. If you are on a fixed 1 year lease which is renewed and the rent amount is set in the lease then that is a rent review and would fire off the 12 month cooldown period.



    So the ability to review the rent during the duration of the lease has to be specified in the agreement? Wouldn't that be the case for most pro-forma leases?


    I'll have to get my friend to check that in her lease in any case.. Thanks.. will look into.


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    #25
    surpy
    Closed Accounts Posts: 383 ✭✭surpy


    http://www.irishstatutebook.ie/2004/en/act/pub/0027/print.html
    20.—(1) Subject to subsection (3), a review of the rent under the tenancy of a dwelling may not occur—
    (a) more frequently than once in each period of 12 months, nor
    (b) in the period of 12 months beginning on the commencement of the tenancy.


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    #26
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    surpy wrote: »
    They can't change the rent in the first year.
    It can be set once per year - it is set at day 1 then can't be reset for 12 months. After 12 months it can be changed at any time (e.g. 18, 22 mths etc) but then it's set again for the next 12



    Ok, so it can only be set once every 12 months. That makes a difference in the terminology used. Have you a reference for that as I found the legislation impenetrable.


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    #27
    runawaybishop
    Registered Users Posts: 9,503 ✭✭✭runawaybishop


    RollYerOwn wrote: »
    Agreed, so could the rent be reviewed after one month of a one year lease? Would it not be correct to say that it has not been reviewed previously?

    No, you cannot review it after one month as the initial signing of the lease will contain terms that state the rent amount - in effect a rental review. If you have, for example, a 2 year lease there could be a condition that states rent is to be reviewed after 12+ months. If this 2 year lease contains no such term then the rental amount is set for the duration of the lease.


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    #28
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    surpy wrote: »
    http://www.irishstatutebook.ie/2004/en/act/pub/0027/print.html

    Thanks didn't see this before I replied to the other post..


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    #29
    surpy
    Closed Accounts Posts: 383 ✭✭surpy


    Frequency with which rent reviews may occur.

    20.—(1) Subject to subsection (3), a review of the rent under the tenancy of a dwelling may not occur—
    (a) more frequently than once in each period of 12 months, nor
    (b) in the period of 12 months beginning on the commencement of the tenancy.
    (2) Subsection (1) has effect notwithstanding any provision to the contrary in the lease or tenancy agreement concerned.
    (3) Subsection (1) does not apply despite the fact that a period of less than 12 months has elapsed from—
    (a) the last review of the rent under the tenancy, or
    (b) the commencement of the tenancy,
    if, in that period—
    (i) a substantial change in the nature of the accommodation provided under the tenancy occurs, and
    (ii) the rent under the tenancy, were it to be set immediately after that change, would, by virtue of that change, be different to what was the market rent for the tenancy at the time of that last review or the commencement of the tenancy, as the case may be.

    thers the whole section, LL cannot even attach a clause to the lease to allow an earlier review. the only thing that allows an earlier review is significant changes to the house

    RollYerOwn wrote: »
    Thanks didn't see this before I replied to the other post..


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    #30
    RollYerOwn
    Registered Users Posts: 154 ✭✭RollYerOwn


    surpy wrote: »
    thers the whole section, LL cannot even attach a clause to the lease to allow an earlier review. the only thing that allows an earlier review is significant changes to the house



    Spot on. Thanks guys. Definitely clears up the first year of a tenancy. Good to see it specified.


    However, in the second year, if the rent was agreed to whatever level both tenant and landlord agree is appropriate, the rent can still be upped by the landlord to the area's "market value" despite the tenant not agreeing to that level to that particular property (which may not itself be worthy of "market value" for the area) and the tenant be forced to pay because they are bound to the lease?


    I believe the PRTB index does not distinguish between a 2-bed and 5-bed house in differing areas of Dublin for example...?


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    #31
    murphaph
    Registered Users Posts: 19,018 ✭✭✭✭murphaph


    No! If a new lease is signed that is a rent review and rent is fixed at that until lease expires at least.


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